Ferguson: Powell saying we are at a wait and see moment tells me they are data dependent

Core Viewpoint - The Federal Reserve is currently in a "wait and see" mode, indicating a data-dependent approach to monetary policy, with no clear consensus among policymakers on future actions [2][4][12]. Group 1: Federal Reserve's Stance - The Fed's decision-making is characterized by a division of opinions among its members, with some advocating for more reductions while others prefer to hold [1][2]. - Chair Powell emphasized the complexity of the current economic situation, suggesting that differing views among governors are a natural outcome of analyzing ambiguous data [3][4]. Group 2: Economic Projections - The summary of economic projections is not a definitive forecast but rather a set of conditional statements reflecting individual policymakers' expectations based on potential economic developments [5][6]. - There is no strong consensus regarding the likelihood of a rate cut next year, with seven participants indicating no movement at all [7]. Group 3: External Economic Factors - Powell's comments on tariffs suggest a belief that their impact on inflation may be diminishing, although opinions vary among analysts [9][11]. - Regarding AI, there is an openness to the potential for a productivity boom, similar to the 1990s, which could influence future monetary policy [12][13]. Group 4: Labor Market and Inflation - The labor market is expected to weaken slightly, and if unemployment rises to around 4.6-4.7%, it could provide justification for a rate cut [15][16]. - A continued decrease in inflation would also be favorable for the Fed's decision-making process [16].